[Mailgram] DALLAS, TEX., June 17, 1977. SENATE COMMITTEE ON FINANCE, SUBCOMMITTEE ON HEALTH. GENTLEMEN: My name is Charles Maimbourg, I am 43 years old and full time practicing anaesthesiologist and a fellow of the American College of Anaesthesiology since 1960 and Board Certified Anaesthesiologist since 1966. I have been doing full time private practice of anaesthesiology since 1963 in Dallas, Texas. The following relates to Senate Bill 1470, Section 12: Optimal care can be provided on a 1-1 basis-one patient to one anaesthesiologist. This section deals with reimbursement of a physician for administration of 2 simultaneous anaesthetic procedures. This practice would be less than optimal care for the patient. This type situation being practiced today has caused inferior care in many localities and this practice has been carried on by anaesthesiologists being paid under the Medicare program. In some localities they are billing and receiving payment for doing 4 or 5 anaesthestic procedures at the same time. I strongly recommend that the medicare system not pay a physician for doing or providing care for more than one patient at a time. The following relates to Senate Bill 1470, Section 15: Section 15 gives tacit approval to the use of a relative value guide or schedule. This has been a bone of contention for years among physicians in the past, a number of other physicians have colluded with third party carriers, including carriers who are proved to act for the Social Security Administration in payment of Medicare benefits, to violate Federal antitrust laws with regard to collusion and fee-fixing. I strongly support the concept of payments to a physician for his services under the usual, customary and reasonable terminology which was established earlier and has been eminently successful and is eminently acceptable to the great majority of physicians. CHARLES L. MAIMBOURG, M.D. MOORE & ASSOCIATES, Re: Senate bill 1470. Senator HERMAN E. TALMADGE, Washington, D.C. DEAR SENATOR TALMADGE: No matter how strongly you wish it and no matter how much testimony you may listen to, to the contrary, the fact remains that a nurse is not a doctor. As is the practice in the social welfare state. Senate Bill 1470 is a plan to equate all anesthetics administered and reduce them all to mediocrity. The optimal condition should be an Anesthesiologist administering an anesthetic to our patient and because the specialty of anesthesiology is becoming increasingly more demanding and more important in the operating room, more and more young physicians have been choosing this specialty in the recent past. If the desire of your Committee is to continue to encourage the highest quality of medical care for the Medicare patients, then you must see that Senate Bill 1470 is specifically designed to discourage this end. Regarding the section of Senate Bill 1470 dealing with a Relative Value Guide, this is nothing but another ploy of Government to encourage monopoly and price fixing. An Anesthesiologist is a physician and should be considered under the present bill along with all other physicians who receive usual and customary fees. The computer can ascertain these fees just as easily for Anesthesiologists as it can for all other physicians. My concern in this matter is very great as I am an Anesthesiologist who has been in the private practice of anesthesia for nine years in the city of Dallas, Texas. I have a Bachelor's Degree in Mathematics, a Master's Degree in Education and a Doctor's Degree in Medicine, and I am a Fellow of the American College of Anesthesiology. Because I believe that the ethical standards and high quality of the practice of anesthesiology, as well as the entire structure of our free enterprise system, would be jeopardized by Senate Bill 1470, I hope that your final decision will be to vote against this bill. Yours very truly, SHIRLEY A. MOORE, M.D. MARVIN J. NOBLE, M.D., Assoc., HON. LLOYD BENTSEN of Texas, Committee on Finance, U.S. Senate, 240 RSOB., Washington, D.C. DEAR SENATOR BENTSEN: I would like to draw your attention to a bill being reviewed by the Subcommittee on Health of the Senate Finance Committee. I refer to S. 1740. As a practicing anesthesiologist in Dallas who has been a Diplomate of the American Board of Anesthesiology for 10 years, I find this Bill to be in conflict with itself as well as with other actions of Congress. Vast sums of federal money have been spent in writing legislation and now in trying to implement those laws to improve the quality of medical care afforded the American people. Section 12 of S. 1740 would be a step backward. I attend one patient at a time, whether I am in an operating room or in an intensive care room, or seeing someone who suffers chronically with pain. I cannot delegate my knowledge and physical skills and judgement to an assistant. I have had the experience of trying to do that. For two years I served in the U.S. Army as an anesthesiologist and worked with nurse anesthetists. Although I was physically present, the care of the patient was more dependent on their moment to moment judgments. And, Senator, their education for making these judgements is less sophisticated than mine. I have also worked as a faculty member (full time) of a medical school. Again, one cannot provide the same service through an agent as he would if he did the task himself. Therefore, I ask, how can an anesthesiologist who "supervises" one or two nurse anesthetists be compensated at a full fee the way I would be if I anesthetize the patient myself? One final thought about section 12 beginning with line 16 of page 31. I have see many more difficulties during the administration of the anesthetic while the surgery is in progress than the outline of A) through F) might suggest. Several years ago a prominent university surgeon addressed the American College of Surgeons that when more than a local anesthetic is being used, there is no major or minor operation; there are only major or minor surgeons. I think that points to the need for more anesthetics to be administered personally by anesthesiologists and note by proxy. Compensation in full when supervising will not lead us to the goal of quality which is so frequently and loudly endorsed. May I address the method of payment outlined at the beginning of the bill and also the "use of approved Relative Value Schedule" on page 37 line 21. First, if we are intent on providing care for those unfortunate people covered by Medicare and Medicaid, the provision of an all or none acceptance of assignment payment method will probably severely reduce the accessibility of medical care for them. If most physicians refuse to accept fee determination by the Medicare carrier, then these patients will have to look further for their care. Secondly, I find the proposed use of a Relative Value Guide (RVG) to be unwise. I have seen it abused in Texas, especially by the Medicare intermediary. I know of its abuse in the Northeastern U.S. It quickly becomes a means of fee fixing and is an absolute restraint. The collusion which will evolve would make the OPEC oil pricing look amateur. And the ones establishing the RVG and its conversion dollar value would most likely be those who are hiring or supervising nurse anesthetists. Although the usual, customary, and reasonable method of determining reimbursement has some deficiencies, it is certainly a more open market type of pricing. This is a statistical system in which no monopoly play can exist. In the American Society of Anesthesiologists' testimony of June 10, 1977, Dr. Ament said this system is satisfactory for determining non-operating anesthesiologists' charge, i.e., pain management, respiratory therapy. I do not see a need to have the insurance carrier have two systems of fee determination for 10,000 physicians. I do not see why we need a different system from other physicians. A RVG could be used for reference in a difficult determination, but it would destroy the multiple levels of charges now in existence. That is monopoly fee fixing. I urge you to prevent these dollar abuses and to help us maintain a goal of quality in the practice of anesthesiology. Sincerely yours, MARVIN J. NOBLE, M.D. DALLAS, TEX., June 17, 1977. Hon. LLOYD BENTSON, 240 Republican Senate Office Building, Washington, D.C. DEAR SENATOR BENTSEN: At present Senate Bill 1470 is before your subcommittee on Health. There are two provisions in this bill to which I would like to voice my strong exception. The first objection is to the use of a Relative Value Guide for reimbursement of anesthesiologists' charges. This concept results in the fixing of charges unrelated to the actual charges for services rendered. The opinion of the Federal Trade Commission regarding the use of such guides by professional groups is that its use represents a restraint of trade. The use of a guide tends to increase the monetary payment of services since there is no provision for competitive pricing. For reasons that are not apparent only anesthesiologists will be reimbursed by this means and all other physicians will be reimbursed by calculating the usual, customary and reasonable charges. In Texas all physicians are reimbursed by determining the usual, customary and reasonable charge for services rendered. I do not understand why this method should be changed or why anesthesiologists should be differentiated from other physicians in this matter. The second objection is directed to the section which permits anesthesiologists to be reimbursed for supervising more than one simultaneous anesthesia equally in amount with the anesthesiologists who provide continuous care for one patient. I believe anyone would agree that optimal care for anesthetic management is one anesthesiologist providing care for one patient at a time. If the government is going to reimburse a physician as generously for supervision of non-physicians as for the optimal care of a patient I feel that there may be a tendency for physicians to acquire groups of non-physicians in their own pay and profit unreasonably from the government. The level of supervision could deteriorate and as such the quality of care equally deteriorate. Individuals providing optimal care would be encouraged by the prospects of financial gain to provide less than optimal care. In effect the government will be paying for a service that is not rendered in that a physician supervising four procedures would receive four times the amount of a physician providing care on a one to one basis. The testimony of representative officers of the American Society of Anesthesiologists supports the law as now written and I can only question their motives. Surely they are not directed toward offering the highest quality of care for the patient. I would appreciate very much hearing from your office regarding these matters. My interest is directed toward providing the finest care for the least amount of the taxpayers' money and discouraging fraud or abuse in the Medicare program. Sincerely, O. B. WILLIAMS, Jr., M.D. HAWAII MEDICAL SERVICE ASSOCIATION, Re: S. 1470, The Medicare-Medicaid Administrative Reimbursement and Reform Act. 362 Russell Senate Office Building. Washington, D.C. DEAR SENATOR MATSUNAGA: Thank you for providing us with a copy of S. 1470 and the opportunity to present these comments regarding this proposal. The Hawaii Medical Service Association along with the doctors and hospitals in Hawaii are concerned about the continuing increases in the cost of medical care to the people of Hawaii. We are in support of this proposal to the extent that it will attempt to bring responsible cost containment to hospitals. We certainly support these efforts. There are some aspects of this bill that are of concern to HMSA which we believe require further study and modification. The cost limitations in S. 1470 apply only to Medicare-Medicaid programs. While this will, of course, save money for these two programs, the provision will simply cause hospitals to pass additional costs on to private sector programs such as HMSA. We strongly urge that any cost limitation program be applied to all classes of hospital patients. Second, the bill sets cost limitations by bed size categories. Increase in future costs would be made based on the classification of hospital and geographic determinations. The exceptions in the bill may be sufficient to recognize Hawaii's unique situation but we are concerned as to whether Hawaii would be considered a separate geographic rate area and whether Hawaii's present level of service would be recognized as a cost differential. We presently experience an extremely short hospital length of stay in Hawaii which results in a high intensity of service per day. High intensity service results in high average cost per day. To average Hawaii's short stay per diem cost with longer length of stay geographic areas would be improper. Thank you for the opportunity to present our views and if we can be of further assistance, please let us hear from you. Sincerely yours, ALBERT H. YUEN, Executive Vice President. STATEMENT OF THE HEALTH SYSTEM AGENCY OF SOUTHWESTERN PENNSYLVANIA BY MATTHEW MARSHALL, JR., M.D., SECRETARY, BOARD OF DIRECTORS I am Matthew Marshall, Jr., M.D., secretary of the board of directors of the health systems agency of Southwestern Pennsylvania, and a practicing physician. I am here to tell you that our board and our people are certainly most assuredly interested in health cost containment; but more importantly, we are interested in the best possible health and the best possible health care that the economy of our system will support. The HSA offers these comments regarding capital cost containment: A. We suggest strengthening of the provisions regarding capital expenditures based upon the following policy decisions approved by the board. 1. That the policy making role of HSA boards to decide issues such as capital construction requirements, occupancy rates, and supply of beds should be preserved and that these functions be continued as an integral part of the plan development process. 2. That it is appropriate to require HSA's to give consideration to the impact of debt service for capital construction on per diem costs and in developing their health services plan, but it is inappropriate for the Federal Government, State Government, or HSA's to set caps on a national, state or local basis. 3. That any debt service limits or requirements of locally contributed capital utilized by the HSA be applied only as guidelines rather than as policy position in order to assure flexibility for the HSA, and therefore, facilitate planning in the best interests of the community. 4. That with respect to assuring that federally financed health services are productive and not wasteful of tax dollars, the board felt that the HSA should receive periodic reports of the appropriateness of levels of care, effectiveness, and quality of care paid for by all federally financed programs. Information should be made available to the HSA's on a periodic basis in order that the HSA develop an adequate health systems plan. Also, it was agreed that aggregate information would be adequate so no breach of confidentiality of PSRO data would be required. 5. Reimbursement rate visibility should be encouraged as a stimulus for better community input to the health planning process, and that the mechanism for the obtaining of this visibility should be the concern of the Federal Government rather than the HSA, since detailed financial reporting is provided to the Federal Government. B. We call to your attention that current legislation permits the Secretary to reject any proposal under 1122 that has been deemed inadequately reviewed by an HSA. The Secretary should be requested to document the extent to which he has exercised the authority which he has in this regard. C. The Secretary has the responsibility to ensure that all health care programs supported by federal funds participate in the development of the health services plan and assure that their plans conform to the plan of the HSA, and we urge that he fully exercise his authority. We appreciate the opportunity of presenting this testimony. REPORT OF THE CAPITAL NEEDS STUDY COORDINATING COMMITTEE The United States currently invests 8.3 percent of its Gross National Product in health care services. In 1975 the average per capita expenditure for health care was approximately $550. As the price of health care services and the quantity of health care services used are increasing, many individuals including health policymakers are questioning the conventional thinking which has said that increasing expenditures to provide more health care will translate into better health. Recognizing the difficult problems of containing health care costs while endeavoring to assure that health care services are of acceptable quality, accessible and adequate to meet demonstrated needs, the Board of Directors of the Comprehensive Health Planning Association of Western Pennsylvania, Inc. established the Health Facility Financing Study Coordinating Committee. The primary charge to the Coordinating Committee was to cooperate with the sponsors of the current study entitled "Financing Capital Improvements for Health Care Facilities in Southwestern Pennsylvania" and to recommend a course of action thereon to the Board of Directors of the Health Systems Agency of Southwestern Pennsylvania. This report is in line with that charge. Specifically, it addresses the problem of the cost of health care in Southwestern Pennsylvania and recommends an instrument for considering the economic consequences of capital expenditures in the health sector. Health planning has paid particular attention to the development of realistic physical, environmental and operational standards for health care facilities. The impact of capital expenditures on health care costs has frequently been neglected or given only scant attention. However, as the cost factor is gaining more attention, it is important that the significance of non-economic factors not be overlooked. Questions of need, availability of manpower, quality of care, adequacy of physical facilities, and cost must be considered concurrently and projects evaluated in terms of all these characteristics. In the final analysis, the problem of the cost of health care services is a matter of public choice. At any particular level of income, the community chooses between such options as expanded police protection, improved highways, and more health services. Given any particular income, an increase in the portion allocated to health services generally will lead to an increase in capital formation in the health sector. Thus, the rising price of health services may reflect choices by the public to consume more health services. There is reason to believe that the public is not fully aware of the implications of choosing more health services over alternatives. When more health services are purchased less income is available for other purposes. Failure to recognize this economic principle fosters the false expectation that we can have more of everything with no change in prices. It is on the basis of this false expectation that so much has come to be expected of health planning and, particularly, HSA's. Until the public media, providers, third party payers and health planning agencies begin to inform the public adequately on the nature of the problem of increasing health care costs, the public will continue to believe that health care can be made more accessible with improved quality within given cost structures. This is where an understanding of the need to exercise public choice is essential. The decision to consume more health services is not simply a decision made by individual consumers. Total expenditures for health services are product of prices, which are largely administered through third party payment mechanisms, and utilization, "which is, in large measure, also administered; that is, determined by the physician". Hence, the normal market constraints on increased prices and increased utilization are obscured by the unique nature of the market for health services. From the perspective of the price of health services, capital expenditures in the health system are drawing increasing attention as a factor in the rising cost of health services. Although wages constitute approximately two-thirds of hospital operating costs, recent trends have concentrated the focus of concern on the growing proportion of health costs attributable to capital investments. In 1964, the cost for the average health facility expansion program was approxi 1 Rashi Fein, "Some Health Policy Issues: One Economist's View," Public Health Reports, LXL (September-October, 1975) 390. |